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What employers should know about Oregon’s pay equity law


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As the Portland Tribune reports, on June 1, 2017 Gov. Kate Brown signed into law House Bill 2005, which prevents pay discrimination on the basis of a protected class. The law has been described as the most far-reaching pay equity law in the country. It also exposes employers to considerable liability risk and prevents them from asking employees certain questions, most notably about their pay history, that have long been commonplace in the hiring process. While the law has yet to go into effect, it is important that employers are fully aware of how to comply with it once it takes force.

What the new law does

The new law makes it illegal to pay members of a protected class a different wage from other employees if they perform comparable work as those other employees. A pay discrepancy can only exist if there is a bona fide reason for the discrepancy that is not based on the employee’s membership in a protected class. As Portland Business Journal notes, such exceptions may include seniority, education, travel needs, production-related systems, merit, experience, or training.

The protected classes covered by the new law are defined by race, religion, color, sexual orientation, sex, marital status, national origin, disability, age, and veteran status.

Additionally, the new law also prohibits employers from asking prospective employees about their salary histories. This prohibition is designed to prevent pay disparities that existed in previous workplaces from carrying over into new ones. Only after an employer has made a job offer along with a compensation amount can they ask about the person’s salary history.

Risks for employers

Penalties for violating the new pay equity law are serious. An employee who believes they have been a victim of pay equity discrimination can file a complaint with the Bureau of Labor and Industries (BOLI). A judgement in the complainant’s favor could result in the employer paying up to two years’ worth of back pay to the employee as well as punitive and compensatory damages as well as the complainant’s attorney fees. Employees can also bring class-action lawsuits against the employer not only on their behalf but on behalf of a class of employees who find themselves in a similar situation.

Much of the law goes into effect in October 2017. Beginning January 1, 2019, employees will have a private right of action under most of the law. Beginning January 1, 2024, employees will have a private right of action stemming from the prohibition against asking about salary history.

Business law help

Businesses need to be aware of the changes that are coming to Oregon’s employment laws. Falling afoul of such laws could result in substantial penalties. Businesses concerned about their legal compliance should contact a business law firm today. An experienced law firm can help ensure that businesses are on the right side of the law and help them quickly and efficiently resolve any business and employment dispute that may arise.